Sunday, December 13, 2015

On the Chinese Billionaire That "Disappeared"

Guo Guangchang became a billionaire by investing where China’s economy was going over the past two decades, pouring money into steel, property and finance while turning his gaze increasingly overseas.

On Friday, Mr. Guo indicated authorities are holding him in connection with an investigation, a stark illustration of how Chinese business and finance is coming under intense scrutiny.

After nearly two days of mystery over the whereabouts of the man who styles himself a Chinese Warren Buffett, a vague statement near midnight issued by his flagship investment conglomerate, Fosun International Ltd., said he is “assisting in certain investigations” by Chinese judicial authorities. The statement, which was signed by Mr. Guo, didn’t divulge his location, but said he is still able to participate in “major matters” before the company.

There was no indication of what the investigations were about or whether Mr. Guo could be implicated himself. Chinese investigators have broad powers to detain both suspects and potential witnesses even when they don’t face accusations of wrongdoing. A Chinese Foreign Ministry spokeswoman said Friday she had no information.

Since a midyear stock-market crash exposed weaknesses in China’s financial system, authorities have detained senior stockbrokers, fund managers and bankers from a handful of the country’s top firms, saying little about the progress or findings of their investigations. About a dozen of the most senior people at the biggest brokerage, Citic Securities Co., have been held for questioning by authorities for months, and the firm says it is cooperating with investigations.

Jitters are particularly high in Shanghai, China’s largest city, where the biggest markets are based.

RW note: Why aren't the officials at China's central bank. The People's Bank of China, in jail? Like central bankers everywhere, they are responsible for the boom-bust cycles, but like central bankers everywhere, they get off scott free.